European Union economy constitutes of economies of 27 states. European Union economy recognized as one of the developed economies of the world. With a GDP of US $13.06 trillion, European Union economy ranks first in the list of world economies.
European Union economy mainly includes manufacturing sector. Growth benefits from small- and medium-sized enterprises boost the European Union economy. Estimates show that small- and medium-sized enterprises (SMEs) have raised .06 percent of the European Union’s GDP. Some of the characteristics of European Union economy can be summarized as follows:
1. European Union economy growth is slower and flexible
Though the growth decelerated from 2.8% in 2007 to 2.0% in 2008 and is expected to reach 1.8% in 2009, still there remains flexibility. The major reasons for this trend can be decelerate in global activity with United States due to chaos in the financial markets and continuous rising of commodity prices. European Union economy has a strong fundamental and so it is still hold up but the global shocks cannot be averted.
2. Inflation in European Union economy rose sharply in 2008
Due to fast increases in food, energy and fuel, inflation in consumer price is expected to rise from 2.4 percent, which was estimated in 2007. It is expected that the rise in inflation can mount up to 3.6 percent in this year, but it is again expected that inflation can again fall to 2.4 percent in the coming year.
3. Situation of Labor market and public finances of European Union countries
Labor market and public finances form an essential part of European Union economy. There is expected to be a slight shift in the labor employment graph, but again there is a possibility of generating 3 million new jobs in the year 2008-2009. Statistics declare that 7½ million jobs were already created in 2006-2007. Thus, the unemployment rate should get lower than 6.8 percent. Global financial crisis has led to depreciation of public finances.
4. Risks prevailing in European Union economy
According to surveys it is observed that risks were more or less in balanced state in European Union economy. Risks related to inflation were to some extent on the upside level. The only risk that can affect European Union economy is the chaos in the financial markets.
Vital Statistics of European Union economy
GDP ranking 1st (2006) GDP (PPP) US $13.06 trillion (2006) GDP growth rate 3.1% (2006) GDP per capita US $29,900 (2006) Inflation 1.9% (2007)
Turmoil in Financial market is the major concern of European Union economy like any other economy. Political leaders of major nations of European Union have decided to sign an official agreement to sustain their financial banking sector, which is badly effected by world financial crisis. The major nations include Germany, France, Italy and Britain.